Move cautiously in TPP talks

Ministers from Japan, the United States and 10 other Pacific-Rim countries failed to reach a broad agreement in their Trans-Pacific Partnership trade talks held in Singapore from Feb. 22 to 25. This followed their earlier similar failure in December also in a meeting held in the island-state. After wrapping up their four-day meeting, the participants in the latest meeting said in a joint statement that they made “further strides toward a final agreement.” But it is clear that the prospects for future TPP talks have become opaque.

Japan should not rush to conclude the talks on the TPP as the pact could greatly harm its national interests. The TPP is not just about tariff rates. The scheme also has the potential to drastically change the fabric of Japanese society, including its social and environmental policies. It is imperative that Japanese negotiators give priority to protecting people’s well-being, not to maximizing economic interests.

One of the causes that led to a deadlock in the Singapore meeting was a conflict between Japan and the U.S. over tariffs on agricultural products and automobiles. Japan reiterated its determination to maintain its tariffs on imports of rice, wheat, beef and pork, dairy products and agricultural products for sugar production — areas that Japan regards as a “sanctuary.” It is reported that the Japanese government is considering abolition or lowering of tariffs on some items within these areas that Japan does not import. But the U.S. insisted that Japan abolish all the tariffs in these areas. Japan, on the other hand, called on the U.S. to abolish its tariffs on Japanese vehicles and vehicle parts at an early date. But the U.S. rejected the request.

Behind the U.S.’ inflexibility is the fact that the U.S. will have midterm elections in the fall of this year. The Obama administration is facing strong opposition from the U.S. car industry to any concession in the field of automobile-related tariffs.

The fact that the Obama administration is facing difficulty in having U.S. Congress enact a bill to give President Barack Obama fast-track authority on trade talks has also narrowed the ability of the U.S. to make concessions.

Immediately before the Singapore meetings, Akira Amari, minister in charge of the TPP talks, hinted that Japan may make some concessions by saying that it is not that Japan will not budge an inch in every field but that it is possible that the influx of cheap agricultural products would damage not only the farmers concerned but also larger local economies.

If domestic farmers are forced out of business as a result of the TPP, Japan’s food security will be jeopardized.

Given Obama’s policy goal of increasing U.S. exports, the possibility also cannot be ruled out that the U.S. will try desperately to impose its business rules on other countries. The investor-state dispute settlement mechanism in the TPP would allow enterprises to supersede governments’ laws and regulations on environment, health, food safety and other issues. Given these factors, Japan cannot be too cautious in the TPP negotiations. It should not be swayed by short-term economic interests.